Following Tuesday’s sharp decline, US major stock indices managed to stabilize yesterday while the US Dollar remain steady as market participants are trying to readjust future interest rate expectations.
FED chair Powell fueled fears of potential higher rate hikes after mentioning that a 50bps hike remains highly possible. The latest economic data have come in stronger than expected which suggests that interest rates are likely to be higher than previously anticipated.
In the meantime, the FED is prepared to act according to future economic data.
Later today, a few economic releases are expected. In the US, initial jobless claims are set to rise from 190K to 195K while in Canada, BoC senior deputy governor Rogers is due to speak.
Below, we will be analyzing the latest price action developments in the major currency pairs alongside gold.